Pages

Saturday, February 28, 2009

Automotive sales forecasts for 2009 are getting repeatedly slashed as consumer confidence plummets. New numbers from J.D. Power show an anticipated 10.4 million unit sales, that's 1 million less than the number they had going into 2009.

With the stock market falling to a number that is half from it's peak in 2007 and with mid-600,000 numbers of new people seeking unemployment benefits, no of this comes as a surprise.

From the Associated Press: "Automakers such as Kia and Subaru, which many car buyers view as high-value brands, could also outperform the competition, he said. Subaru is the only automaker that Toprak expects to post a sales increase for the month.

Sales of the automaker's top-selling all-wheel drive Forester, which starts at $19,995, more than doubled to 5,162 units in January." more.

"I know that 50% of my advertising is wasted. I just don't know which half," retail guru John Wanamaker famously quipped in 1886.

It wouldn’t be a marketing blog without quoting Wanamaker at some point. iMedia just released a new report showing how important marketing dollar effectiveness is in this downturn. Clients are more interested than ever about how effective their dollars are being spent. With fewer customers, reduced demand and making the most of every dollar spent in a financial crunch are the utmost importance in every industry, especially automotive.

As an industry, automotive online media teams typically don’t suffer from a lack of data. So now is the time to bring those analysts in to see how media is performing and to move your buys more to behavioral targeted communications that have higher conversion rates. According to Jupiter Research, “When conducted on lower-funnel researchers, behavioral targeting increases online automotive ads’ effectiveness in capturing consumers’ attention—and therefore generating response.” (August 2007 Report on “Online Automotive Advertising”).

For the cost, homepage takeovers typically do not perform well. Why? Because most people are just not in-market and even if you do attract a higher click-through rate (CTR) with your creative, the quality is low when measuring shopping behaviors for an automotive brand. Autos are highly considered purchases. Focusing more on in-market, conquest and segment online media buys makes more sense in a marketplace where active shoppers are contracting. Better to focus your media on impacting these buyers than trying high cost awareness buys.

Also, if your media team is only looking at CTR effectiveness, than you need them to refocus their attention to measure shopping behaviors like build & price, dealer searches, and other shopping engagement activities. Understanding the quality of your click-through rate is imperative to making better decisions.

Thursday, February 26, 2009

Social media is all the rage in digital marketing these days with companies venturing out to FaceBook, Twitter, MySpace, and even creating their own community web sites. What approach a manufacturer takes should depend on what goals they want to accomplish with social media and the brand must understand how their customers behave on the web.

One experiment is Generation Benz, an online community established for “an invited group of Gen Y netizens to open up about the brand.” In fact, when I tried to register for the site -- using my real demographics -- I was not accepted. A fellow co-worker had informed me he had a similar issue and “got in” when he completed a profile as a 29 year old. So, keep trying to sign-up if you want to take a peak at the site.

According to Mercedes-Benz USA VP/Marketing Stephen Cannon, “Our Generation-Benz community is a natural extension of our desire to broaden the Mercedes-Benz family, and establish a dialogue with future buyers to guide us with the design of our vehicles and direction of our brand."

So we know Mercedes is interested in taping into their aspirational customers and after spending weeks on the site they are doing a lot of consumer research, online focus group engagement.

Unfortunately, I cannot share content screen shots from the community due to the community’s participant legal agreement that I accepted:

In addition, except as provided in this Agreement, you may not copy, modify, translate, reproduce, publish, broadcast, transmit, distribute, perform, display, license, sell, or create derivative works from any Member Content or any other content appearing on or through the Service.

That said, I can definitely describe what content is presented on Generation Benz. Mercedes is doing several things to engage. Whether they are the right thing to connect with 20-somethings is another thing all together. There are consumer opinion polls where you can vote on how an interior palette makes you feel. One discussion asked users to share their opinion on competing Lexus and Mercedes Benz commercials currently running for the RX350 and M-Class SUVs. None of this really sounds all that compelling to a Gen Y audience but they are getting some participation on the site, particularly when it comes to new and future product content. I should state that community members can "suggest a topic".

A private community is definitely the right strategic approach for Mercedes based on the demographic they are targeting and the type of engagement they are doing. Finding the right topics though seems to be a struggle since this is a marketing organization that starts the discussions, topics are not user-generated which probably reduces usage.

One of the best behaviors on the site is the engagement from Mercedes’ staff that really participates with the community members, making the community feel they have the ability impact the brand’s decisions. Their email communications also encourage participation and repeat visits (see image to the right.)

Without access to primary data showing how effective the site is with attracting repeat visitors, it is difficult to know how well the community is doing. After evaluating all of the current discussion threads on the site, it is clear repeat visits are low and there are only two dominant users of the site with over 300 posts each, others who post tend to have less than 10 posts. Active users only appear to include maybe 20 or so participants, at least across all forum comment sections.

One way it could improve engagement is by giving users a reason to participate. “Consumers have to have some incentive to share their thoughts, opinions and experiences on a company Web site,” according to the Wall Street Journal. There is no incentive on the site. Some things that could improve that include:

The site does give users an indicator showing how many posts they have done. Post indicators provide a visual "game" on community boards which leads to an increase of usage. An indicator should also move people to new levels like newbie, contributor, expert, et cetera as a way to show degrees of engagement. Believe it or not, this stuff actually works in communities as some users view it as a fame reward.

Other incentives could include cash incentives or product promotions, which could include Mercedes lifestyle discounts for apparel. Or really encourage participation by offering a Generation Benz logo hat or t-shirt that could further promote the site to the user’s personal network, make them feel special and that they have exclusive access to the brand.

All in all, the Generation Benz web site is a good example of a community site from an automotive company with a very clear set of goals, reaching out to a target audience they want to engage. It just seems like the site moderators need to find more relevant topics for their users, and less for their marketing department's purposes. They also could benefit by rewarding users with incentives to participate more.

Tuesday, February 24, 2009

Since my last post on Twitter, there have been a couple articles and discussions going on about the whole idea of Twittering as a branded company name or using your personal name while representing a brand. I'd like to share some conclusions I have reached that would be effective for any brand, not just automotive. Here it goes...

There are three approaches to Twiiter ID naming for brand communications on Twitter:

1. Simply use the brand name like @Zappos2. Do a hybrid that adds a friendly name with the brand like @Alicia_at_Honda3. Name only like @SeattleGirl who Twitters for Microsoft

David Armano recently wrote an article for Ad Age titled “When Personal and Corporate Web 2.0 Brands Collide” where he reaches the conclusion of the concept of “brandividuals” where two brands come together, the personal and the corporate. David doesn’t really take a clear stance on what method is preferred when it comes to branding your Twitter ID name; instead, he just feels “people with real faces” are best for the medium. I agree. The real face matters in the Twitter medium.

The thing I am finding with Twitter is that the real face does come through from effective Twitter communicators like the Zappos CEO Tony or with Frank from Comcast, who Twitters under the ID @comcastdotnet. So, brands with interesting people who can write interesting things, do develop a following under a branded name. You basically don’t need the person’s name in the ID, just the brand name will do. The most important element is having an effective communicator for the brand and effective communication can come from either three methods for Twitter ID naming.

There are two big issues when using option #2 (hybrid) or #3 (using a person’s ID only.)

Regarding a hybrid Twitter ID, it helps personalize the communication by having a person’s name clearly there. That’s the positive. The negative is when a person like Alicia leaves Honda or moves to a new job in the company, the brand would have to change their ID to the hybrid name of the new person. Doing this would lose the thousands of followers gained under the Alicia_at_Honda account. Following is the equity built on Twitter and it would have to be rebuilt under a new identity which is confusing for the brand’s audience and would require some effort by Alicia to help with the transition to a new Twitter ID.

The same issue exists when a company leverages the social following of a personal Twitter ID like @SeattleGirl (Marty Collins). When the person leaves or changes roles with a company he or she has all of the followers attached to their personal account and not a branded ID. This leaves a very messy transition for someone like SeattleGirl where she must promote a new Microsoft identity to get her followers to move to, but they have established their relationship more with her and less with the brand.

Of course even branded accounts that have the person behind the curtain leave can suffer if the new person taking over is less effective. What’s nice about Twitter is that it is very democratic. I can simply un-follow you with a simple click if I don’t like your communication updates.

The big benefit of going with a branded Twitter ID like @JetBlue is that they don’t have to rebuild their following like options 2 and 3 do. It is also quite clear from an effectiveness perspective to see how well the brand is doing if it is gaining a large following. This is really difficult to measure when option #3 is used, because there can be a lot of reasons why a person is being “followed.” It could’ve been from a prior following, the person’s professional network, fame factor, or other things that may have more to do with the person than say an interest in the brand. So, it is difficult to tell if the brand is really effective in the Twitter medium when using option 3.

My belief is that brands should use a brand ID when doing Twitter or any social media communication. Their equity, in the long-term, will go beyond just one person if the brand is committed to social media. The number of Followers the brand is able to engage over several staffing changes will establish effectiveness on a medium like Twitter.

Tuesday, February 17, 2009

I have been following Twitter for a short while, about three months (you’re welcome to follow me @cbaccus.) So, please understand that I am not a Twitter evangelist. I’m also not anti-Twitter. I simply want to learn what is effective and see what brands (particularly automotive brands) are doing on this channel.

Varying Efforts: Ford, Volvo and Nissan

So far, there are a couple of efforts that have caught my attention. One is the work of Scott Monty, the social media person from Ford’s PR team, to see what he is doing to promote Ford’s brands on Twitter. The other efforts come from product launch “trials”. Volvo recently started a XC60 Twitter account and so has Nissan with their Nissan Cube launch. They are two efforts that are using Twitter to try to gain an audience.

First let’s look at Scott’s endeavors at Ford.

For disclosure purposes, Scott is a client of mine in a round about way. I don’t work directly with him but I work for the agency of record on the Ford marketing account and have met Scott, but I don’t know him well nor have I worked on any direct projects with him. I just have simply observed by following his blog and Twitters.

This week Scott is getting trashed by Jalopnik, a very popular automotive blog. The dig was mainly one about the power of Twitter as a way to sell cars along with some personal attacks focused around Scott’s strong ability to self promote. I’ll focus on the selling cars part of the criticism levied by Ray Wert of Jalopnik who questions if Monty’s efforts really impact automotive sales.

From listening to Scott, he has established some strong relationships on Twitter and claims to have had some impact on changing Ford’s brand perception through his communications with those who have forgotten about Ford or have a negative perception of Ford from prior experience. The most public example is Scott’s traction with technology blogger Scobleizer.

Scott is a PR guy at Ford. So, he is primarily focused on improving Ford’s image by influencing media coverage. Improving the brand’s image should eventually result in increased sales and, yes, it may take years to really have any significant impact on sales. But I wouldn’t call what Scott is doing marketing. He is doing public relations.

The other efforts by Volvo and Nissan are truly marketing efforts. Volvo’s communications on Twitter 90% of the time promote drive events where the new vehicle is being toured around the States and the marketing team is using Twitter to promote event location and timing. If you are not interested in these events or are too much of a Twitter fanatic that you can’t just look up the event location on Volvo’s XC60 blog than the Twitter follow loses all value. The other 10% of posts comment on questions people ask the account administrator.

Nissan’s effort was to create a personality for the vehicle. They Tweeted (is that what it’s called?) witty phrases that imitated the car’s personality. It was rather urbane stuff, but for the Nissan Cube fanatics I’m sure it was kind of fun for them and probably produced a grin or two every time a new Tweet came across. Plus the Tweets kept the vehicle in the consumer’s mindset. The problem is very few people followed it with barely a 100 followers, and considerably less once you exclude the agency and Nissan employees who followed it.

The Importance of Twitter

The above examples are not sweeping endorsements of Twitter for automotive marketing, but don’t give up just yet. Understanding why Twitter is even considered right for marketing in social media is still important to automotive brands.

There seem to be two dominant, related themes that are drawing brands to Twitter.

1.) The Power of Relationship Marketing that has been promoted in books like Groundswell. 2.) The idea that mass advertising has lost its impact. Seth Godin says, the strategy is to market to the Innovators, “because they care. These are the people that are obsessed with something and, when you talk to them, they’ll listen, they like to listen and it’s about them and if you are lucky they’ll tell their friends.”

So Twitter is about relationships and it’s about word of mouth impact. Some brands are finding success through Twitter by leveraging the popularity of Twitter advocates. American Express recently started Open Forum, an online community for small business owners with Guy Kawasaki a well-known author and entrepreneur, writing for the community. Kawasaki has also leveraged Twitter and has attracted roughly 60,000 people, who follow Guy on Twitter, to the Open Forum site. Examples like this is creating a lot of buzz showing the power of Twitter to attract eyeballs to corporate website endeavors. It’s not the only avenue to promote the site; it’s simply part of the marketing strategy.

Is It a Medium Worth Automakers Time?

So can automotive brands find success in this space? Possibly. I would think more success will come from efforts that are about long-term relationships than setting up temporary Twitter accounts for a vehicle’s launch, those will die when the launch budget dries up and besides relationships take time.

I do like how Scott Monty created accounts around different themes for the Ford brand, like @FordDriveGreen. Unfortunately, very little is posted on these Ford branded Twitter accounts and most of the Ford communications are done via the @ScottMonty account. So, very little relationship marketing is happening from a branded account; instead one person is becoming the relationship, which is risky especially when Ford and Scott part ways.

That said, there is hope that relationship building could happen and could positively impact a brand’s perception if it is an early adopter, which is something Scott Monty is trying to do at Ford by using Twitter so extensively. I agree with Scott’s approach that Twitter is about building relationships and relationship marketing is a driving force that does have some success stories and will have more, even in the automotive world… eventually. Provided they are done right with an achievable goal, effective branding, developing meaningful relationships through honest dialog, and by participating in social media beyond just promoting your marketing driver events.

The online presence was anything but. Sure you could click on a small box in the lower right to see how The Chase was filmed, but Audi’s A6 website was all about setting the brand up as the luxury make for this decade.

Audi has been having some fun with its competitors’ comical stereotypes (see Meet the Beckers post.) Their assault on Mercedes, BMW and Lexus continues as the Audi sells itself as the brand that has been plodding to rein the luxury car battle.

The site’s content is divided into decade slices: 70’s for Mercedes luxury, 80’s for BMW yuppies, 90’s for Lexus badged Toyotas, and of course Audi as the “Present Day” current brand innovator. There is one flaw in the message. If Audi is for this decade, the 2000 decade is coming to a close. So what is the luxury make for the 2010 decade? Hyundai?

Message flaw aside, Audi does provide some fun messaging as its products are truly rivaling its German neighbors. The new A6 and recent A5 debut and A4 refresh, not to mention R8 supercar, are all giving the luxury leaders some strong product competition – yet the sales numbers still need to deliver the goods.

“Let’s expose the quality of the audience for what it really is. A bunch of intensely inebriated viewers who are about as likely to purchase a car or ship out a package the next day as is Pete Rose to ride the next Triple Crown winner to victory.”

A bit of a rough, arguably simplified and even flawed assessment of the Super Bowl audience, but Jaffe’s point is to mock the reach of this single day event. The reality is the likely to purchase affect is fairly poor considering the cost to participate in the day’s hype. Besides, it’s more about the hype generated than the ad running at game time and unfortunately for Audi no one noticed their spot. It got lost in the mix and that’s a bad result.

The A6 does lag behind the BMW 5-series (45k units), Mercedes E-Class (38k units) and Lexus GS (15k units) with 12,000 units sold in 2008, source Automotive News. But is the issue an awareness issue or something else like quality, brand loyalty from competitor owners or product shortcomings? I wish I could say awareness was the issue and Audi is addressing the awareness through one of the few mass media days left in our culture, but the A6 is a well-known entity in the segment. The bigger issue is probably the brand’s association with Volkswagen and a history of poor quality numbers and the stayed, bland styling the car has had up until the recent model; though, even the styling isn’t a huge departure from the exiting model design.

The Super Bowl spot probably had little to no impact on the vehicle. The Crash spot was male, enthusiast driver focused and Audi has no issue getting that audience’s attention. It does have an issue holding their attention to convert to a sale against some pretty strong competitors. Unfortunately, the Super Bowl spot was not breakthrough and barely memorable (unlike last year’s effort that was oddly memorable as Audi debuted the R8 with a nod to The Godfather film.)

Worse is the TV ad was entirely not integrated with the campaign for the A6 which is trying to message Audi as the luxury car for this decade of luxury consumers. Chase scenes shout more 1970’s Bullit and less present day.

It seems to this marketing person that Audi could’ve better spent their ad dollars by not participating in the Super Bowl TV spot markup. They would’ve reached their audience better through targeted ads. Besides the A6 campaign still needs to decide if it is going for the stunt driver crowd or trying to define itself as the car of the “Present Day”, neither position sounds compelling which is probably part of the reason for the lack of consistent messaging – someone at Audi still doesn’t like the campaign idea I’d venture to guess.

Tuesday, February 3, 2009

When I saw Hyundai's Assurance campaign debut in late 2008, I knew Hyundai was going to hit a cord with the current economic climate. Several automakers were throwing more money and more money and yes... you guessed it, more money to entice new auto shoppers. Meanwhile, Hyundai started a program to put consumers at ease by letting them return their new lease within 12 months of purchase if they are laid off (some restrictions apply.)

The Hyundai Accent, Sonata, and Santa Fe all saw significant jumps in sales year-over-year. Since nothing is really pushing these sales other than Hyundai's Assurance campaign, it is clear this program is getting some great traction for budget minded consumers.

The next question is who will copy Hyundai's lead after seeing their January 2009 surge in a down economy. It definitely proves that saving thousands of dollars is not the impetus automakers expect it to be; it's taking on the elephant in the room - consumer confidence.

Monday, February 2, 2009

Lexus made its iconic debut in 1989 with a commercial called Balance that demonstrated luxury and quality by balancing a pyramid of champagne glasses on the hood of a Lexus LS 400. This time around Lexus has dramatically increased the challenge with their Cards spot for the Lexus ES.

The web address, http://www.lexus.com/cards, features the spot and a behind the scenes video where we learn about the challenges faced by the professional cardstacker, Bryan Berg. First of all, who knew you could make a living stacking cards? Second, is the Cards spot right for Lexus ES?

The ES is probably the least defined vehicle in Lexus's lineup. It is sandwiched between their 3-series challenging Lexus IS sports sedan and the bigger mid-size luxury fighter the GS. The Card spot dips into Lexus' successful marketing past (once named a Best Ad by Ad Age magazine) and communicates the quality of it's sound dampening and smooth engine sound. I'm not sure the feature of a quiet cabin is as effective now as it was in 1989.

It was Lexus that brought the idea of the quiet cabin as a distinct attribute of a quality car. Before Lexus, wind noise and sound dampening never really had the importance it does after the Lexus Balance spot. The "owned" the feature. Today sound dampening can be found in a Toyota Corolla. It's not so unique any more and some journalists and drivers have even poked fun at the sadness of not being able to hear the sound of your car's engine, as if the driver is missing some of the fun a car gives its owner. So, as a feature it just doesn't have the cache it did in the 80s.

Where the ad works is in some of the PR coverage it may get due to it's obvious extension from famous the Balance ad. Unfortunately, it does little else. Stacking cards on the hood isn't going to change many minds to buy an ES and you could probably do the same thing on an Acura, Mercedes, BMW or Infiniti with the same result. The parity is too close these days when it comes to quiet cabins and smooth engine idling that I doubt many consumers really care about Lexus' card trick. more.

Don't Miss a ThingFree Updates By Email

Search This Blog

What is The Auto Marketing Blog?

The Auto Marketing Blog is a marketing blog analyzing various companies and their brand engagement online. It looks at efforts that affect sales, new product launches, viral campaigns, social media usage, online media choices, brand lift, and other related advertising . Within these entries I will not only share opinions on what I think brands are doing wrong (or right), but will also provide ideas to further enhance efforts that may improve your own marketing decisions.